Amid the bullish sentiment in the crypto market, Shiba Inu (SHIB) has recently gained significant attention from traders and investors. A recent analysis by renowned crypto analyst Ali Martinez has highlighted a rare buy signal for the token, potentially indicating an upward trajectory for its price.
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For those unfamiliar, the TD Sequential is an indicator used by traders to identify potential price patterns and reversals. Developed by Tom DeMark, the TD Sequential is a series of numbers and letters that represent specific counts on a price chart.
When the count reaches a ‘9’ (TD9), it generally indicates a potential reversal in the market’s current trend, either bullish or bearish. Its usefulness in predicting market changes has made it an important part of many traders’ toolkits, especially in the field of cryptocurrencies.
Ali Martinez, in a recent one tweet, pointed out that the TD Sequential has issued a buy signal on the Shiba Inu weekly chart. Such an event is significant not only because of the likelihood of a bullish turn, but also because of the rarity of these signals.
Analysis of historical data shows that in the last two cases where such a buy signal manifested, the SHIB price rose by 118% and 71% respectively. While this past performance does not guarantee future results, it does provide a tempting backdrop to the current scenario.
MartÃnez stated:
The WL Sequential showed a buy signal [the] SHIB weekly chart. Notably, the previous two bullish turns of this indicator led to price increases of 118% and 71% respectively. Given the frequency and accuracy of such signals, it is a crucial time to keep a close eye on SHIB.
The TradingView chart shared by Martinez outlines the SHIB/TetherUS (USDT) perpetual contract on the Binance platform. This shows that in June 2022, Shiba Inu registered an impressive increase of approximately 117.80% within eight weeks. This rally was preceded by a ‘9’ candlestick on the TD Sequential indicator, indicating the buy setup.
In late September 2023, another TD Sequential ‘9’ buy signal emerged, resulting in a 71.17% increase in SHIB’s value within the subsequent nine weeks. As of October 25, 2023, another new ‘9’ buying setup has manifested itself on the weekly time frame. Given the token’s historical reaction to these setups, a bullish move seems likely.
While the TD Sequential is a respected tool, it is worth noting that all indicators should be used in conjunction with other tools and analysis methods. The volatile nature of the crypto market means that predictions, even if based on historically successful indicators, carry inherent risks.
A consistent signal
At the time of writing, the Shiba Inu price was trading at $0.00000732 and has thus managed to regain the neckline of the descending triangle on the weekly chart. As outlined in previous analysis, SHIB has been in a make-or-break moment over the past two weeks. However, since SHIB was able to bounce above the neckline, the bullish scenario has now emerged.
As was the case from June to early August 2022 after the formation of the third bottom (yellow circle), SHIB was now able to rise again towards the falling trend line of the triangle as a result of the fourth bottom (second yellow circle).
So the TD9 signal and this technical pattern coincide. But just as then, a new defining moment would come for the Shiba Inu price: the struggle to break out of a more than two-year downward trend.
Featured image from Shutterstock, chart from TradingView.com